Top-up fees back on funding agenda

Universities would be allowed to charge higher fees to students under plans being considered by the Treasury as part of the government's comprehensive spending review.

This week, Margaret Hodge, the higher education minister, pointedly refused to rule out the option of top-up fees, which some of the elite Russell group of universities have long been arguing for as the only way to compete on the world stage.

This would mean abandoning David Blunkett's pledge, made in February last year when he was education secretary, that in the next parliament there would be "no levying of top-up fees if we win the next general election".

Mrs Hodge told the House of Commons' select committee on education: "It is constantly being raised with us and, to the extent that we're looking at everything, we're looking at that."

She was pressed by Labour MPs to clarify whether this meant top-up fees were on the agenda, but refused to repeat Mr Blunkett's pre-election pledge. "We are looking at a huge range of options. They all have different impacts as to who they benefit and dis-benefit. They will have costs and savings and we have just got to get it right," she said. "It is an issue that's been on the agenda and we are keeping it on the agenda. Nothing is ruled in and nothing is ruled out."

Permitting universities to charge their own top-up fees could swiftly lead to substantial increases at Oxford, Cambridge and other prestigious institutions, or in sought-after subjects like medicine or law, but would produce a lot of political flak if students from poor backgrounds were deterred from applying.

Ministers may prefer the option of simply raising the standard tuition fee - currently £1,075 a year - across the board, as the poorest 40% of students pay no fees at present. This would bring the Treasury more income - which could be passed onto the higher education sector - and be less politically explosive. It would be unpopular with middle class parents, however. Another option would be to drop the interest rate subsidy on student loans on the grounds that it benefits high-earning graduates most, although Mrs Hodge expressed strong criticism of the idea when she appeared before the education committee.

Barry Sheerman, chairman of the education committee, said it would be finalising its report on student funding and access next week, including MPs views of top-up fees. At the committee hearing he accused Mrs Hodge of "floating on the ocean with no bearings" over the long delays in settling on a policy for student fees.

A decision is due to be announced as part of the comprehensive spending review.

Tony Blair announced the review at last year's Labour party conference, saying student fees had been a frequent issue on the doorstep during the general election campaign.

The National Union of Students reacted with fury to the consideration of top-up fees. Its national president, Owain James, said the government had made a manifesto commitment to the country that it would not introduce top-up fees and last October promised to improve the student funding system. "Just seven months down the line it appears to think it can get away with breaking promises and actually increasing the hardship suffered by students.

"Tuition fees have already proved to be a barrier to access to university and top-up fees will only augment the problem. The fact that they are still on the agenda highlights a huge disparity in the government's drive for access. Top-up fees would actively discourage the very students the government is trying to attract and further widen the gap between students from different backgrounds by determining access to different universities on a student's ability to pay, as opposed to their ability to learn," said Mr James.